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Budweiser to invest more in e-commerce as virus hits offline demand

Published 07/05/2020, 05:51
Updated 07/05/2020, 05:55
© Reuters. Portfolio beer brands of Budweiser Brewing Company APAC Ltd are displayed during a news conference on the company's IPO in Hong Kong

© Reuters. Portfolio beer brands of Budweiser Brewing Company APAC Ltd are displayed during a news conference on the company's IPO in Hong Kong

BEIJING (Reuters) - Budweiser APAC (HK:1876), the Asia-Pacific arm of beer giant AB InBev (BR:ABI) plans to invest more in e-commerce as the coronavirus changes consumer habits and hits demand from restaurants and nightspots, its chief executive said.

The firm swung on Thursday to a loss of $6 million for the first quarter from a profit of $259 million in the same period last year, after pandemic curbs shut eateries and bars in China and hit consumer traffic in South Korea for months.

Although a sharp drop in new cases brought signs of a recovery starting in April in China and South Korea, the company said the situation was driving it to relocate resources to its e-commerce businesses.

"E-commerce is already growing strong double digits in the past and it’s accelerated." Jan Craps, co-chair and chief executive of Budweiser APAC, told Reuters in an interview.

"We see very strong double-digit growth in e-commerce. When you look at the channels like Meituan (HK:3690) and Ele.me, the new models of O2O, we see a triple-digit growth during the crisis," he said, referring to "online to offline" interactions and China's two dominant food delivery platforms.

The company, which has a portfolio of more than 50 beer brands including Stella Artois, Corona and Harbin, reported quarterly revenue of $956 million, down from $1.6 billion last year.

In China, which began shutdowns in late January to stem the spread of the virus, volumes fell 46.5% over the period but are expected to post a smaller fall of 17% in April, in a sign of improvement, Budweiser said.

The company said it would keep up efforts to market its premium and super-premium beers, such as Budweiser, Corona, Stella Artois and Hoegaarden, demand for which expanded in China during the pandemic.

© Reuters. Portfolio beer brands of Budweiser Brewing Company APAC Ltd are displayed during a news conference on the company's IPO in Hong Kong

Craps said China offered ample growth potential as the premium segment only formed about 16% of its total beer market, far smaller than the proportion of about 40% in mature markets in the West.

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